Monthly Corporation Tax Provision in Accounts...

[prozak]

I usually calculate corporation tax on the last day of the company financial year and do the required journal entries on that day before I close the years accounts.

I've been thinking about doing a monthly or quarterly CT provision so that I have a better idea through the year of the liability and what capital is available for distribution.

Are there any accounting rules or any other reason that would make this a bad idea?

Cheers.

ps. Yes I may also have to reduce the expense and liabilty if I am benched or something, but i think my math skills can handle it.

pps. CT expense is in my capital accounts so no issue confusing me about expenses

[Clare@InTouch]

No problem at all, this is quite common when you prepare management accounts on a regular basis. Just make sure that the balance is correct at year end.

[northernladuk]

I would guess in Prozaks case he has enough in the bank to pay his dividends from profits even though he doesn't know the exact values until he prepares accounts but for a newbie wouldn't it be important to do this monthly to make sure he doesn't start allocating divis from money that is not his?

[prozak]

I would guess in Prozaks case he has enough in the bank to pay his dividends from profits even though he doesn't know the exact values until he prepares accounts but for a newbie wouldn't it be important to do this monthly to make sure he doesn't start allocating divis from money that is not his?

Yes that is one of the benefits as well.